Matsushita looks to strengthen emerging markets operations

JayAlabaster

(Adds details, quotes from Matsushita executive.)

TOKYO (MarketWatch) -- Matsushita Electric Industrial Co. (6752.TO) said Wednesday it would strengthen its branding and marketing in emerging markets, as part of its mid-term plan to generate more income from overseas.

The Osaka-based company, which sells products under the Panasonic brand, said it would nudge up spending by at least Y40 billion through March 2010 for its marketing operations in the BRIC countries and Vietnam.

Matsushita's sales are currently split about 50-50 between Japan and overseas, but the domestic market for its TVs and electronic goods is competitive and largely saturated. So the company is looking to tap into the new-found purchasing power of consumers in emerging markets.

Hitoshi Otsuki, who heads Matsushita's overseas operations, said it would revamp and streamline its marketing operations in countries such as China. He said the company would combine its four sales companies there into a single entity and cut sales channels to 700 from 2,200.

The Y40 billion investment is small in scale for Matsushita, but Otsuki called it "strategic" and said it was the first time the overall company had made such a lump expenditure.

"Up until now, our group companies (in various countries) have invested separately," he said.

As part of its mid-term business plan, the company aims to generate Y10 trillion in sales by fiscal 2009, 60% of which will come from abroad. For the current year it targets sales of Y8.78 trillion and a group net profit of Y246 billion.

The developing countries of Brazil, Russia, India and China are referred to collectively as the BRICs.

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